Washington, D.C. — A new analysis from the Center for American Progress finds that the Trump administration’s war with Iran is making it harder for U.S. manufacturers to build in America by driving up costs, disrupting supply chains, and weakening demand.

The war’s economic fallout is compounding earlier damage from the administration’s trade policies, putting additional strain on U.S. manufacturers, as well as the millions of blue-collar jobs they support. 

“Trump’s trade and economic policies have been a disaster for American manufacturers and their workers. Since Trump’s ‘Liberation Day’ tariff announcement, the country has lost nearly 200,000 blue collar jobs,” said Ryan Mulholland, senior fellow at the Center for American Progress and author of the analysis. “Now Trump’s war with Iran is only making it harder to manufacture in the United States. U.S. producers are facing higher input costs, higher freight costs, supply chain shortages, and falling demand—all a result of Trump’s war of choice.”

CAP’s analysis finds:

• Input costs are rising: The cost of component parts and materials is increasing. Aluminum prices hit a four-year high as Middle East production is disrupted, while the cost of semiconductors and other inputs is also rising, as energy prices increase around the world. 
• Freight costs are increasing: The cost of diesel, gasoline, and jet fuel have all increased dramatically since the start of the war. This is likely to make the cost of obtaining parts and materials used in U.S. manufacturing more expensive; and raising the cost of transporting goods to customers as well. 
• Supply chains are slowing: Many goods shipped through the Gulf have been rerouted or remain stuck in ports. Meanwhile, industry reports suggest that up to 70 percent of major global ports are experiencing congestion issues, likely forcing production slowdowns and increasing costs for U.S. manufacturers.
• Global demand for U.S.-made goods is likely to weaken: The cost of energy is rising fast in Europe and Asia. Liquid natural gas prices are up roughly 55 percent to 88 percent in those markets, reducing demand for U.S. exports, as potential customers face tightening budgets.
• Domestic demand is softening: Consumer sentiment has fallen to near record lows, with leading analysts suggesting that Trump’s war could reduce job growth by 10,000 jobs per month, with manufacturing among the hardest-hit industries.

Read the full column: “5 Ways the Trump Administration’s War With Iran Is Making It Harder To Make Things in America” by Ryan Mulholland.